Cheque Fraud Scheme – Businesses Beware

It recently came to my attention that numerous businesses were being targeted by a sneaky fraudulent cheque scheme which nearly cost a number of my associates to lose a lot of money! So I felt the need to write a blog about what the scheme is and how to NOT be caught out by it as a fellow business.

How the Scheme Works

I’ve seen a few variations of the scheme in action and their stories change each time, however it always seems to follow the same steps:

They contact you legitimately asking to use your services, the job they require equates to a good £1000 or so – however they will be travelling from abroad to use your service.

Because they are paying from abroad they want to pay via cheque, so eventually the cheque arrives however it’s value is for much more than you quoted.

You then contact them to let them know about the cheque and they reply explaining a serious mixup has happened. The story works like this – they are currently travelling and got their own accountant to send them a cheque to pay for their travel to the UK and also sent you a cheque for your services. But the accountant has gotten the cheques muddled up and you have THEIR cheque which they need in order to pay for their travel to the UK! “Oh no!”

They then explain this is pretty urgent and ask you to cash the cheque, take out the money you’re owed (for the services they are hiring you for, plus any transaction fees) and then transfer them the remainder of the money into their personal bank account so they have enough money to book their tickets to fly to the UK and use your service.

If you’re busy or not paying much attention then this seems pretty legitimate, right? So you’ll very likely go to the bank, cash the cheque, send their share of the money and be happy in the knowledge you’ve been paid and helped out a client in need.

That’s how the scheme works in principal, but of course NONE of their story is true. I just wanted to explain the process so that you know all of the steps. Next I’ll explain what actually happens.

The Fraudulent Cheque that Costs You

So you know the steps but here’s what is actually happening ‘behind the scenes’.

These fraudsters have managed to hack a real bank account for their own use which has quite a lot of money in it already and also setup an entirely fake bank account ready for you to transfer the money into. The cheque they have sent you is a legitimate cheque that has been fraudulently used from this poor person’s bank account – which they of course know nothing about!

Once you cash that cheque and transfer the fraudsters their share of the money the cheque then clears after 3 days because it’s completely legitimate and manages to get past banks security checks. Once cleared, you then transfer the fraudsters their share of the money to their own bank account and you then keep the amount you’re owed (because they have stressed how important and quickly they need the money in order to travel to the UK and use your service). The fraudsters then immediately withdraw the funds from their bank account.

A few days pass and suddenly the bank are alerted by the poor person who’s account has been hacked of the money that has now left their bank account via a cheque…and guess who they blame? Yep, YOU! Because you were the one who cashed the cheque YOU are now liable to pay back all of the money from that cheque to the bank. Not just the amount you kept…ALL of the money!

This would of course be fine if all of the money was just sat there, since you would just explain the situation and get them to take back all the money – however this likely isn’t the case. You will have already paid the fraudsters their ‘share’ and are now liable to pay back that share to the bank. Meanwhile the fraudsters have vanished with the money and are never seen again!

What to do if you’ve been targeted

If you have unfortunately been a victim of this devious scheme then unfortunately there’s not much you can do and are now legally liable to pay back the money. You can of course go and try to seek legal advice but from hearing previous stories, there’s not much the law can do to help you. YOU cashed the cheque and therefore YOU are liable to pay back the money, I’m very sorry to say.

However if you’ve been approached by a ‘client’ with a similar story to this then STOP and immediately contact the Action Fraud team here – https://www.actionfraud.police.uk/report-a-fraud-including-online-crime-questions

They are the national governing body in the UK for dealing with fraud cases and you may be able to help them catch the fraudsters before it’s too late.